If the car has transferred ownership once since John Smith, it is correct to say "is the previous owner" or "is a previous owner". If it has transferred ownership more than once, it is correct to say "was the previous owner" or again "is a previous owner". The use of "the" before previous owner (singular) indicates that there can only be one previous owner, and that would naturally be the immediate owner prior to the current one.

And, yes, 'was the previous owner' is also correct, and it doesn't have to mean he's dead.

Although David's answer is pretty crafty, he is taking it way to categorical. Like, if you say it this, it can only mean this. Say it another way, it still makes sense, but it necessarily means something else.

In answer to Helen's question, break it down, pretend you're an elementary school student. John was the owner. What kind of owner? The previous owner. If 'was the owner' meant that he was alive, adding 'previous' doesn't make him dead.

Both 'was' and 'is' the owner are both correct, but in a grammatically structured perspective, 'was' is the preferred word of usage. In this perspective, 'is the previous owner' does not make sense. If he is, then he can't at the same time not be, as 'previous' would mean that he only was and is not anymore the incumbent owner. However, since 'previous' can be used as meaning the same thing as 'former' or 'ex-', in which case it would make perfect sense, 'is the previous owner' can still make sense and is considered correct. But most people don't actually think all that when it's just spitting out of your mouth real fast.

In the case of 'John was the former owner', the 'former owner' can be thought of as one word or concept - that has already been established - then adding 'was' in the picture makes him dead, in most cases, but it's also accepted to mean that he's not necessarily dead.

Once again, to clarify, 'previous' is simply an adjective to owner, not part of the same concept, although you would normally have to think of it as the same concept or else you would get confused real easily.